School district committee builds multiple budget scenarios amid uncertain state funding

‘We don’t get to play around on this one’

Members of the Kenai Peninsula Borough School District’s Finance Committee on Monday honed three plans for the district’s immediate financial future.

The meeting came less than a month after board members opted to build the district’s budget for the upcoming fiscal year around a state funding bump that was approved by lawmakers, but then vetoed by Gov. Mike Dunleavy. Recommendations made by the committee will be forwarded to the full school board — which votes on the final budget document — for consideration.

Committee members mapped out three budget scenarios. The first assumes no new state funding for K-12 education for fiscal year 2025. The second assumes a $340 increase to the base amount of money the state gives school districts per student. The third assumes a $680 increase to that amount, as approved by state lawmakers but vetoed by Gov. Mike Dunleavy earlier this month.

When KPBSD started its budget process, it projected a roughly $13 million deficit for fiscal year 2025, which starts on July 1, 2024, and ends on June 30, 2025. Then, the district reached new agreements with its two staff unions that included pay raises and raised the deficit to just under $16 million.

Since the last time the board convened to discuss the budget, KPBSD Finance Director Elizabeth Hayes said she’s learned that the borough may be able to contribute another $1.9 million to the school district this year. That lowered the deficit to about $13.7 million — the amount committee members started working with during Monday’s meeting.

“You’ll see that, in the revenue side, there’s an adjustment to revenue to the (Kenai Peninsula Borough) appropriation due to an oversight on my part,” Hayes said of the $1.9 million. “It came to my attention that they can actually give us $1.9 million more than I had been projecting in the original budget.”

All committee members agreed to spend all the money the district has in spendable savings — about $5.8 million — to offset the deficit.

The district also plans to ask for full funding from the Kenai Peninsula Borough. How much money the Kenai Peninsula Borough gives to the school district is guided by a formula in state law that calculates a minimum and maximum contribution amount. For fiscal year 2025, the borough must give KPBSD at least $33.2 million, but no more than $58 million.

Hayes said the maximum value was calculated slightly differently this year for the first time since she’s been with the school district, which is why her calculation was initially off by $1.9 million.

Hayes said she’s picturing board approval of a balanced budget document during a special meeting in April to get it to the borough assembly by the May 1 deadline. The board will have another work session to discuss the budget during its regularly scheduled day of meetings on April 1.

KPBSD has already sent out all its certified staff contracts for the upcoming school year, most recently for roughly 100 non-tenured teachers earlier this month. As of Monday, KPBSD Human Resources Director Nate Crabtree said the district is still waiting for more than 26.5 full-time equivalent positions of those to be returned.

If half of those contracts come back unsigned — meaning the associated employees decide not to come back to the district next school year — KPBSD can increase its pupil-teacher ratio by five without having to lay off staff.

Monday’s discussion was organized by tackling one scenario at a time.

Worst-case scenario

In a worst-case scenario — in which KPBSD doesn’t get any new state funding for the upcoming fiscal year — finance committee members decided Monday to increase that ratio by one at all district schools, apart from small elementary schools.

Board member Jason Tauriainen said, in a worst-case scenario, he thinks the district should defer planned upgrades to classroom SMART Interactive Flat Panels by one year, pause planned curriculum upgrades and cut extracurricular travel. He also floated the idea of capping sports stipends and limiting what sports the district offers by only allowing those sports that can be offered at all schools.

“If we’re in a worst-case scenario — in which they don’t give us anything — that’s $13 million and cuts,” Tauriainen said. “We don’t get to play around on this one.”

KPBSD Superintendent Clayton Holland said he is thinking along similar lines when it comes to budget cuts.

“My recommendation is that we look at every single thing that stays away from human beings, before we get to the human beings,” he said.

In the worst-case scenario, KPBSD is still left with a $3.1 million deficit if it makes all the proposed cuts except for school student-to-teacher ratios. Those cuts would include closing school pools and theaters, cutting school supplies and discretionary spending, deferring SMART panel and curriculum upgrades and cutting extracurricular travel, among other things.

Board members clashed on the necessity of various services provided by district support staff, with members ultimately moving forward with a 10-day reduction for all support staff except for custodians. Tauriainen said cuts to the number of days worked by custodians should be non-negotiable, while others said school secretaries are just as strained.

With all those changes and a plus-one increase to KPBSD’s student-to-teacher ratio at all schools, Hayes said the district is “in the ballpark” of what would be needed for the district to balances its worst-case scenario budget. The committee opted not to change that ratio in the district’s small elementary schools.

Other options

Building the next scenario, in which KPBSD gets a bump in state funding of about $5.7 million — a $340 BSA increase — committee members were able to add back some of those cuts. They started with bringing back pools, theaters and athletics. Then came transportation and decreases to student-teacher ratios.

The second scenario could also bring back work days for staff in the district office, extracurricular travel, discretionary spending accounts for schools and planned updates to district curricula.

In the third scenario, where districts get a $680 BSA increase, KPBSD can balance its deficit using money it has in savings and have some leftover to potentially bolster some district programs.

Tauriainen cautioned members against getting too far ahead of themselves, but floated the idea of proposing a scenario that assumes even greater revenue for the district to show what the district could do if it was able to spend money proactively rather than using everything it has to fill in gaps.

“We’re wanting to show them what we can do if we’re funded up to that level, which is more like the $1,000 level like some of the people have proposed, to be able to add some intervention to do be able to do better for our children,” he said.

“ … I can see benefit to that, to showing people what it would look like if we did get it. Now if we don’t get it, it doesn’t happen.”

Multiple attendees during Monday’s meeting expressed frustration with the current status of budget talks.

Holland said, regarding pools and theaters, that Monday’s discussion was exactly what the district was hoping to avoid this budget cycle.

“We were trying not to stir people up, to get fired up for something that we were not going to do,” Holland said.

Board member Virginia Morgan reiterated the difficulties that come with building a budget around an uncertain amount of revenue.

“The frustrating part of this is that we don’t feel like we can add staff — especially certified staff without an increase in the BSA that we know we can count on — but we never get that,” she said. “It just feels like this constant circle of not being able to achieve what we’re being told we need to achieve because we’re not being given a budget we can count on. I think if we have extra money, it needs to go into the classroom, but we can’t do that responsibly with one-time funding.”

Board President Zen Kelly said after Monday’s meeting that the process lays out in black and white what’s at stake in the absence of additional state funding for schools.

“These are the choices we have to make,” he said.

More information about KPBSD’s budget process can be found on the district’s Board Docs website. Users can still access the district’s budget balancing software at

Reach reporter Ashlyn O’Hara at